The incident came to light after the express train from Salem arrived here this morning and some of the more than 200 boxes carrying the cash and transported through three cargo coaches of the train were found tampered with.
Police officials were tightlipped on the quantum of money that was transported from Salem as well as the cash suspected to have gone missing.
Police suspect that culprits could have entered the coach on the Salem-Vriddhachalam section where trains don't run on electricity but on diesel locomotives, making it easy for the robbers to make their way from the top.
Police said they were probing many angles including how the theft could have happened despite police protection provided to the cash which had both currency notes printed prior to 2005 as well as soiled notes.
Currency notes printed prior to 2005 had been ordered to be exchanged by Reserve Bank of India with June 30 last as the deadline.